Psychological empowerment, which requires quality leadership and a favorable environment supportive of teachers’ personal and professional advancement, is pivotal in the overall process of teacher development. This grounded theory study aimed at surfacing the role of humor use in the integrative process of teacher psychological empowerment from the lens of private school principals’ lived experiences. Guided by the Corbin and Strauss grounded theory design, individual, in-depth and semistructured interviews with 20 purposively selected private school principals were conducted. Member checking was done to validate the findings of the study. Four distinct phases emerged which correspond to the process of psychological empowerment. Interestingly, the Clinical Eye Model of Teacher Psychological Empowerment describes how these principals provide favorable conditions, supportive structures and effective mechanisms for development and how the motivational, relational, developmental or transformational role of humor is accentuated in each phase by employing the powers of sensitizing (looking-in phase), connecting (looking-through phase), deepening (looking-upon phase) and transcending (looking-with phase). The emerged theoretical model can be used as guide in designing faculty development programs through which teachers are afforded with venues and opportunities for professional growth. Finally, it can also be used in motivating school leaders to take a more proactive stance relative to humor use as strategy for teacher psychological empowerment.